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Answers to questions about the United Airlines announcement

February 4th, 2014

WHAT’S HAPPENING?

What’s United doing?
United plans to reduce its operations in Cleveland by 64 percent, with the biggest impact on commuter routes.

Why did United make this decision?
United indicated that the Cleveland hub has not been profitable for more than a decade and that the hub lost tens of millions of dollars in recent years. The decision was driven by these losses, and the timing was accelerated by industry-wide effects of new federal regulations that impacted the airline and its regional partner flying.

When will changes take effect?
They will be phased in from April through June.
When did GCP become aware of this decision?
We learned of the decision on Saturday.

Did anyone at GCP attempt to contact United and stop this action from taking place?
We formed a coalition of businesses that has been working closely with United, with the goal of preserving the hub. Ultimately this was a business decision made by United. However, we plan to reach out to United officials to get a better understanding of the rationale behind the decision.

Could we have done more?
We made a strong effort with great commitment from businesses and the City, and United was highly complimentary of our efforts. It made a business decision that we don’t believe we could have changed.

Do you believe the efforts by GCP and others to retain the hub were ultimately a waste of time?
Not at all. United officials have acknowledged that our community’s broad-based “United for the Hub” campaign was impactful. The investment we made in retaining the hub has allowed us to improve our position as a great market. We will now mobilize an aggressive program to replace as many of the lost routes as possible.

Wasn’t it obvious that this was United’s intent all along?
No. We presented a strong case for United to maintain its hub status, and we are confident they considered that case carefully before making this business decision. We have long recognized that this was one possible consequence of the United-Continental merger after witnessing similar outcomes in other markets through consolidation within the industry.

Did United mislead us?
No. United has been grateful for our efforts and the progress we’ve made, but it has always been clear that business conditions would drive any decisions.

WHAT WILL THE IMPACT BE?

How will service to and from Cleveland be impacted?
United plans to reduce its operations in Cleveland by about 60 percent, with the biggest impact on commuter routes. When the schedule reductions are fully implemented in June, on peak days United will offer 72 flights to 20 destinations from Cleveland on a nonstop basis, including all of its domestic hubs as well as key business and leisure markets.

Will this stop or slow down airport development?
We don’t expect development to stop. There is a great master plan in place that we hope can be fully realized.

Will parts of the airport be closed?
The City will have to answer that.

What about the settlement agreement with United that said they’d stay for five years? How much will the City be paid now that United has broken that contract?
Any such details will have to come from the City of Cleveland.

How will this decision impact efforts to attract business to the region?
Air service is very important to businesses, and our goal is to do everything we can to ensure convenient and affordable air service here. Fortunately, we have a strong case to make to the airline industry-much stronger than when the United Continental merger took place. We have stronger origination/destination volume than most hubs, our airport is much improved and costs have decreased, and many visitor-generating attractions have opened.

Does GCP expect this decision to negatively impact any attraction or retention projects currently under way?
Not at all.

Do you expect that businesses will leave or move jobs because of this?
It’s far too early to speculate. We’re going to work to minimize the impact on air service, so our hope would be that it doesn’t affect jobs.

Will this affect our ability to draw tourists to our new attractions?
It’s far too early to speculate, but we think the addition of those attractions makes this a more appealing market for airlines.

WHAT’S GOING TO HAPPEN NOW?

What is GCP going to do next?
Working with the City of Cleveland, the State of Ohio and other partners, we are committed to a focused and dedicated effort over the coming months and years to attract additional air service. We have assembled a group of business leaders who have been working on the air service issue for three years. They are organized, committed and thoroughly understand the issues.

Was GCP prepared for this possibility, and what plans are in place to attract a replacement for United?

We have long recognized that this was one possible consequence of the United-Continental merger after witnessing similar outcomes in other markets through consolidation within the industry.

We have been focused on improving our strengths as an air service market and are in a much better position today than we were at the time of the merger. These strengths are the same as those that make the case for business attraction: We have stronger origination/destination volume than most hubs, our airport is much improved and costs have decreased, and many visitor-generating attractions have opened.

In addition, we have the resources and leaders necessary to drive the case and will begin to reach out to other major airlines immediately.

Have you been talking to other airlines?
We have been working to strengthen our position regardless of airlines but have focused our relationship-building on the airline that was already committed and providing the most air service.

Which airlines will GCP work to attract?
The City will dictate what happens but we expect to seek out every viable alternative.

When will outreach to other airlines begin?
The City will dictate what happens but we expect that outreach to being immediately.

Why would any other airline seek to expand service at CLE now that United has decided to reduce its presence?
We believe we are a very attractive option for any airline to expand service here. Key reasons include:

A much-improved airport that is reducing costs to carriers.

A high percentage of origination/destination passenger traffic.

Billions in new development throughout the region that will increase air demand.

Continued infrastructure investment at Hopkins that is planned and funded.

What if we can’t attract additional flights from other airlines?
We believe we have a strong case to make to other airlines, and we and the City will do everything we can to make that attract the flights we need.

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The Greater Cleveland Partnership mobilizes private-sector leadership, expertise and resources to create attractive business conditions that create jobs, grow investment and improve the economic prosperity of the region.